Legislators review new care episodes

Medicaid proposes 3 for pay plan

A proposal to add three new “episodes of care” - tonsillectomies, gallbladder removal and colonoscopies - to the state’s health-care payment overhaul cleared a joint legislative committee Friday, a month after the approval was delayed because of lawmakers’ questions.

Meanwhile, the state Department of Human Services postponed the presentation of a fourth episode, oppositional defiance disorder, to the House and Senate public health committees.

Sen. Cecile Bledsoe, chairman of the Senate committee, said lawmakers had received several calls from health-care providers with concerns about the addition of the disorder to the “episodes of care” designation.

“They felt like it was being rushed and they hadn’t had a chance to verbalize their concerns,” said Bledsoe, R-Rogers. She said she didn’t have details about the callers’ concerns.

Under the state’s Payment Improvement Initiative, Arkansas’ Medicaid programand two private insurers financially reward doctors who keep the cost of providing an episode of care below a range considered acceptable or penalize them for exceeding it.

The doctors will still receive fees for each service they provide. The rewards or penalties will be calculated based on the average cost of treating an episode for one year.

The initiative is expected to save the nearly $5 billion Medicaid program $843,151 in the state fiscal year that ends Sunday, and $1.1 million next fiscal year, according to the Human Services Department. The federal government provides about 70 percent of Medicaid’s funding in Arkansas, with the rest coming from the state.

The initiative began in October with three episodes of care: upper respiratory infection, maternity care and attention deficit hyperactivity disorder. Congestive heart failure and total joint replacement were added in February.

The state’s Medicaid program, which is leading the effort, is using the payment model for all of the episodes. Arkansas Blue Cross and Blue Shield is using the model for all of the episodes except upper respiratory infection and attention deficit hyperactivity disorder and plans to use it for colonoscopies and gall bladder removals.

Little Rock-based Qual-Choice is using the model for maternity care and total joint replacement and plans to use it for colonoscopies and gall-bladder removals.

The Human Services Department has credited the initiative with prompting doctors to reduce their expenses in treating other ailments that haven’t yet been added to the initiative, leading to a slowdown in the growth of the program’s spending.

At the meeting Friday, some lawmakers questioned whether the initiative will lead doctors to reduce their expenses by providing fewer services or by avoiding serving the elderly or others who may have more complications than younger, healthier people.

“I’m worried that my doctor may look at me at some point and say, ‘I’m not as good of a risk for this,’” said Rep. Charlotte Douglas, R-Alma, who is 61.

“A lot of elderly people are scared about this,” she said.

Dawn Zekis, director of Health Care Innovation for the Human Services Department, said basing rewards and penalties on doctors’ average costs over a year gives the doctors the flexibility to focus more attention on the patients who need it and less on those who don’t. The first rewards and penalties to providers are expected to be issued early next year.

The department uses a “long list of exclusions” to remove cases with expensive complications from the calculations, she said.

“We don’t want to lump everyone together just because they have the same condition,” Zekis said.

Rep. John Burris, chairman of the House committee, and Bledsoe offered different opinions about whether the initiative would lead to the rationing of care.

“You’re incentivizing good behavior, you’re not rationing care or denying health care,” said Burris, R-Harrison.

Bledsoe, whose husband is a doctor, countered, “I know what it’s like to deliver health care, and I can see the opportunities for rationing care under this.”

Sen. Stephanie Flowers, D-Pine Bluff, said she was “very uncomfortable” that the advisory panels that helped draft the payment rules for colonoscopies, tonsillectomies and gall bladder removal included only doctors from northwestern and central Arkansas.

“If we’re going to set policies in these episodes of care, it ought to be an effort that comes together as a result of representation from all over the state, and I don’t see it,” Flowers said.

Zekis said the panels met with doctors, patients and others from across the state to gather input. The department would welcome participation from more doctors, she said.

The department did not receive any comments on the addition of the episodes at public hearings in April, and no written comments were submitted, Zekis said.

With no lawmakers objecting, Bledsoe deemed the addition of the episodes “reviewed.”The Legislature’s rules committees will review the episodes next month. If those committees approve them, the first year of expenses tracked for those episodes will start in October.

At the public-health committees’ meeting last month, Human Services Department psychiatrist Larry Miller said oppositional defiance disorder is a behavior pattern in children ages 6 to 17 that includes being hostile and refusing to follow rules.

About 8,000 children on Medicaid are treated for the disorder each year, at an average cost of $2,143 each, according to the Human Services Department. Treatment involves medication for “initial stabilization,” as well as family therapy.

The payment improvement initiative would reward providers for reducing the use of inappropriate medication for the disorder, according to the department.

Human Services Department spokesman Kate Luck said in an e-mail that the department wanted to gather data it has collected through the payment initiative on the treatment of attention deficit hyperactivity disorder to present to lawmakers before bringing oppositional defiance disorder back to the committee for approval next month.

Front Section, Pages 1 on 06/29/2013

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